March 21, 2019 Edition.
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For the first time ever the review this week opens with the awful and worrying events in New Zealand. We have no seen the catastrophic outcome of far-right hate speech and extremism and it needs to be called out and fought. I will watch our pollies for what they actually do – concerned they will wimp it. Ms Ardern has turned out to be a hero and has major gun law changes underway. ScoMo rather less so and the Turks are being particularly offensive - maybe just their President!
In the US Trump keeps fighting for his wall and is rather half-hearted with his condemnation of right-wing extremism.
In the UK the final vote on Brexit happens Tuesday we all hope and we will know what happens next by later in the week. Sadly has now been deferred again
In OZ we have the usual political paralysis with the pleasing development that the Reserve Bank now realises that Climate Change needs to be factored in to future plans. Seems to me that is a step forward!
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Major Issues.
Booms, busts and babies: how house prices affect the birth rate
By Matt Wade
March 10, 2019 — 12.00am
The ups and downs of house prices are always in the headlines. But the profound ways those property market movements affect our everyday behaviour get far less attention.
Housing is such a big expense, and so fundamental to our wellbeing, that it shapes some of our most basic choices. That includes when, and even if, we have children.
Researchers in several countries, including Australia, have discovered a strong correlation between house prices and birth rates.
University of Sydney economists Kadir Atalay, Ang Li and Stephen Whelan have examined how changes in property values in Australia between 2001 and 2015 affected the birth rate.
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Australian sharemarket's outperformance likely to end
Updated Mar 10, 2019 — 3.51pm, first published at 12.00am
The outperformance of the Australian benchmark versus other developed markets appears to have run its course, as the prospect of interest rate cuts is overtaken by concerns around slackening earnings growth amid a global economic slowdown.
Fund managers say that growth stocks and interest rate-sensitive bond proxies are best placed to withstand such conditions, which is good news for high-octane digital names trading at elevated multiples, but less optimistic for value plays.
The S&P/ASX 200 Index has outperformed its global peers so far this year, bolstered by better than expected earnings and a changing bias from the Reserve Bank. The benchmark index has risen 9.9 per cent this year while the S&P 500 is up 9.4 per cent.
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Mega super funds will make ASX less relevant says ex-Schroders chief Greg Cooper
Mar 10, 2019 — 11.45pm
Super funds are set to threaten the role of the Australian sharemarket as they grow larger under the weight of trillions of dollars of funds and move to take full ownership of companies rather than invest in them through shares.
The biggest super funds are likely to become financial institutions in their own right, and the way they control capital and think about responsible investing would have a huge influence on the economy, the former head of Schroders Asset Management, Greg Cooper, said.
"I think you will see a small number of financial institutions that are a significant part of the lives of Australians," said Mr Cooper, who stepped down as Schroders chief executive in December.
Greg Cooper: "I think you will see a small number of financial institutions that are a significant part of the lives of Australians."
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'I'm the elected deputy PM of Australia': Barnaby Joyce stakes leadership claim
Updated Mar 11, 2019 — 10.36am, first published at 9.30am
Barnaby Joyce has claimed an entitlement to the leadership of the Nationals because he was in the top position when elected by the people.
But Prime Minister Scott Morrison has moved to squash a leadership change in the junior Coalition partner, describing the prospect of a budget week spill as "nonsense".
"We have a fantastic leader of the National Party in Michael McCormack and there will be no change to that," Mr Morrison said.
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Bill Shorten given Winx-like odds to win election as Coalition fortunes collapse
By Shane Wright
March 10, 2019 — 11.59pm
Punters have all but given up on Scott Morrison leading the Coalition to victory at the election, predicting Labor will sweep the nation and command a parliament that may not include Tony Abbott.
Since November, odds across a string of electorates have swung towards Labor, with betting agency Sportsbet now installing ALP candidates as favourites in 24 Coalition-held electorates.
Leader of the Opposition Bill Shorten, backed New South Wales Labor Leader Michael Daley and his pledge to invest more in education.
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Taxpayers face bill of up to $1b to fund MPs' retirements
By Eryk Bagshaw
March 11, 2019 — 12.00am
Taxpayers will pay up to $1 billion to fund the retirements of politicians under an axed parliamentary pension scheme, and the cost of the scheme will blow out by another 10 per cent by 2020 to $50 million a year.
A wave of pre-election resignations on both sides of politics this year will see the public foot the bill for their post-politics lives, with the total amount expected to reach a peak of $59 million in 2033.
Retiring Coalition ministers Christopher Pyne, Julie Bishop and Nigel Scullion are set to receive between $188,000 and $220,000 a year for the rest of their life. Steve Ciobo, 44, will be eligible for the same payment after he turns 55.
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Siobhan McKenna: Meet the woman calling the shots at News Corp
By John McDuling and Jennifer Duke
March 11, 2019 — 12.00am
It was 2017 when Siobhan McKenna sat opposite Cynthia Whelan in News Corp's Surry Hills offices with the difficult job of resolving a decade-long deadlock between two of Australia's most recognisable media businesses.
Foxtel, the pay-TV joint venture between News Corp and Telstra, was struggling in the face of video streaming giant Netflix, and bitter tensions between its two shareholders weren't helping.
About a year earlier, Telstra chief executive Andy Penn had discussed floating the business with News Corp co-executive chairman Rupert Murdoch and chief executive Robert Thomson. But the potential IPO had to be shelved as Foxtel's business weakened alarmingly.
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Economists: lonely, misunderstood angels in shining armour
By Ross Gittins
March 11, 2019 — 12.00am
If you’re tempted by the shocking thought that economists end up as handmaidens to the rich and powerful – as I’m tempted – Dr Martin Parkinson wishes to remind us that’s not how it’s supposed to be. The first mission of economists is to make this world a better world, he says. But don’t expect it to make you popular.
Let me tell you about a talk he gave on Friday night. It was a pep talk to the first of what’s hoped to be a regular social gathering for young economists come to Canberra to study, teach or work in government or consulting.
Apparently, working in Canberra can be a tough gig if you don’t know many economist mates to be assortative with.
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Labor fuels business fears with talk of higher minimum wage
By David Crowe
March 10, 2019 — 5.37pm
Labor has ramped up its plan to lift the minimum wage despite industry claims the election pitch could cost employers $8.7 billion a year, fuelling talk of new laws being put to Parliament to force the workplace umpire to boost pay rates.
Employers are urging Opposition Leader Bill Shorten to reveal how he intends to increase the minimum wage after Labor finance spokesman Jim Chalmers said the independent umpire would “do the right thing” to fix the problem.
The Australian Chamber of Commerce and Industry has sought an urgent meeting on the Labor policy while the Australian Industry Group warns that unemployment will rise if Labor orders an increase in wages.
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Newspoll gives Morrison another headache
A 50th straight Newspoll loss for the coalition has come as the Morrison government prepares for a make-or-break budget.
Australian Associated Press March 11, 201911:18am
Prime Minister Scott Morrison might be preferred leader of Australia but the coalition has hit a new low of 50 consecutive Newspoll loses.
It's bad news for the Morrison government as it prepares for an early federal budget in just three weeks which it hopes will launch its re-election bid.
Mr Morrison is tipped to call a May election shortly after Treasurer Josh Frydenberg hands down his first budget.
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Why we can expect MMT ideas to spring up in Australia
Alan Kohler
New York Democrat Alexandria Ocasio-Cortez is one proponent of MMC on the left of American politics. Picture: AFP
• 6:45AM March 11, 2019
The trouble with modern monetary theory (MMT) is that, as with fiscal policy generally, it would be run by politicians, and we’ve only fairly recently managed to prise monetary policy away from them.
Having MMT enable unlimited government spending is a left-wing politician’s wet dream, but a dry’s nightmare.
A passionate debate is now going on in the United States over MMT after Democrat Alexandria Ocasio-Cortez launched her “Green New Deal” last year and other Democrats like presidential candidate Elizabeth Warren have been proposing other big spending plans that would be “financed”, or rather enabled, by MMT.
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Momentum-killer polls crushing the Coalition
Sunday, March 10, 2019.
- March 11, 2019
It was quite simply a momentum killer. Relentless campaigning on boats and the economy designed to scare voters off supporting Labor has seemingly fallen flat.
Scott Morrison looks to have zero cut-through with an electorate that has made up its collective minds.
And it’s no wonder. The distractions have been never ending.
The Prime Minister put his foot in his mouth on International Women’s Day. New cabinet minister Linda Reynolds did the same over the weekend, highlighting her ignorance on wages polices.
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Top 100 SMSFs control $8 billion
Tim Mackay
Updated Mar 12, 2019 — 1.09am, first published at Mar 11, 2019 — 11.00pm
We all love reading top 100 lists. We argue over who should be in the Triple J's Hottest 100 list.
We take pride in the two Australian companies in the Top 100 Most Valuable Global Brands' list – Commonwealth Bank and ANZ. We avidly read The Australian Financial Review Rich List to see who are Australia's 76 billionaires.
The Australian Taxation Office (ATO) recently announced it has a self managed super fund (SMSF) top 100. Among its greatest hits are the 100 SMSFs with the largest asset balances.
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Australian winter will disappear by 2050, ANU team claims
- 11 March 2019
- Written by Sam Varghese
Professor Mitchell Whitelaw testing the climate tool. Jack Fox, ANU
A tool that analyses climate data, developed by a team from the Australian National University School of Art and Design along with their colleagues from the ANU Climate Change Institute has shown that by 2050 winter, as we now know it, will no longer exist.
Instead, the team claimed in a statement, people in Australia will experience a new season they have dubbed "New Summer", during which temperatures of 40 degrees Celsius would not be uncommon.
The tool, which was prepared for the Australian Conservation Foundation, is here and can be used to check on thousands of places to get an idea of how the weather there will be like in 2050.
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The Nationals could ruin Scott Morrison's last shot at the election
Updated Mar 11, 2019 — 6.05pm, first published at 6.00pm
Bill Shorten looked as though he was allowing himself to believe he might actually become prime minister on Monday.
No doubt because the latest Newspoll showed the Coalition was going down the toilet after a fortnight in which the government ramped it up over boat people and the economy – its two signature strengths – for no reward.
The last shot in the locker for Scott Morrison is the April 2 budget and its $9.2 billion in tax cuts and cash payments.
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Big power companies snub government underwriting for new coal plants
By Cole Latimer
March 12, 2019 — 12.00am
The nation's largest electricity companies have snubbed calls for them to use the government's power subsidy scheme to build new coal-fired power stations.
Federal Energy Minister Angus Taylor has said 10 of the 66 submissions to the scheme, that will subsidise new energy plants, involved coal-fired generation.
Elements within the Coalition government have escalated their calls for Prime Minister Scott Morrison to support more coal-fired power under the program, specifically in Queensland.
But several major companies told the Sydney Morning Herald and The Age that they have either not applied to the scheme or had focussed their proposals on renewable energy.
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Zealotry, self-interest behind Nationals’ push on coal
- 2 hours ago March 12, 2019
The fight over building new coal fired power stations — with or without government subsidies — highlights the problems within the conservative side of politics. It polarises opinions without points of reconciliation. Why? Because it’s all or nothing: you either support new coal fired power or you don’t. It’s nigh impossible to find a centre ground and appease both sides in the debate.
Before detailing the political stand-off which exists, the facts of energy price points need to be laid out. They are too often ignored by advocates of state sponsored new coal fired power. Coal fired power is currently cheaper than renewable power, that is a truism in this country. There is a huge “but” which needs to follow the factual observation, however. The “but” is that only existing coal fired power is cheaper than renewable power. Building new coal fired power stations is not cheaper than existing renewable power, and it’s not even cheaper than building new renewable power facilities. The way the hard right advocates for new coal fired power conflate these two very different propositions is why this debate moves from fact-based analysis to fictional opinions and partisan arguments.
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CBA’s chief economist Michael Blythe makes case for tax cuts
- March 12, 2019
Commonwealth Bank’s chief economist Michael Blythe says that if Australia is in a “per capita” recession, then it’s the strangest one he’s ever seen.
And while there might be pressure on the RBA to cut interest rates to help address the slump in GDP growth, there were other options available, thanks to a rapidly improving budget position that makes bringing forward tax cuts possible.
According to Australian Bureau of Statistics data, GDP growth plunged from an annualised rate of 3.8 per cent in the first half last year to 0.9 per cent in the second half.
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Australian online advertising grew to $8.8b in 2018
- 12 March 2019
- Written by Sam Varghese
Online advertising in Australia hit $8.8 billion in the calendar year 2018, an increase of 11.6% on the previous year, figures released by the Interactive Advertising Bureau on Tuesday show.
The IAB's Australia Online Advertising Expenditure Report, published by Price Waterhouse Coopers, said growth in digital advertising was an outcome of the shift to media consumption online.
It said Australians each now spent nearly 100 hours a month on desktop PCs, smartphones and tablets and about five million people used the Internet on their TVs each day.
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Reserve Bank of Australia’s growth forecasts are looking increasingly optimistic
- March 12, 2019
If the Reserve Bank was increasingly isolated last week, it’s marooned on a desert island this week.
The central bank’s upbeat forecast of 3 per cent growth this year, which has looked increasingly shaky in the wake of last week’s sombre national accounts, was dealt a double whammy today.
The closely watched National Australia Bank business survey revealed business confidence and conditions fell last month, dashing hopes the modest improvement in January would be sustained. The Australian dollar has dropped almost a quarter of a cent in early morning trade, to around US70.6 cents.
The survey of 400 odd business around the country found profitability waned along with the flow of new customer orders. Sentiment has now returned to its reading in December — which saw the biggest drop since the financial crisis.
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Housing finance remains weak in January
- By James Glynn
- Dow Jones
- March 12, 2019
Australian housing finance remained soft in January, adding to fears the sector will slow the economy sharply in 2019 and spur interest rate cuts before the end of the year.
The number of home loan approvals, including refinancing, fell by a seasonally adjusted 2.6 per in January from December, the Bureau of Statistics said.
Economists had expected no change for the month.
The value of loans for investment housing, excluding refinancing, fell by 4.1 per cent from December, the ABS said.
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Rate cut odds firm as business conditions slide resumes in February
- March 12, 2019
Business confidence and conditions have resumed their steep decline, supporting calls for renewed interest rate cuts.
Business confidence fell 2 points to 2 index points in February, while conditions fell 3 points to 4 index points, driven by falls in profitability and trading to below average levels, while employment was unchanged at 5 points, according to NAB’s monthly business survey.
The relatively broadbased fall in business conditions continued a relatively sharp fall since April 2018.
Forward orders fell to below average levels in the month, and capacity utilisation declined further suggesting that conditions are unlikely to regain much ground, according to NAB, while confidence has now been below average for some time.
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Consumers and business united by growing fear that economy is failing
By Shane Wright
March 12, 2019 — 1.27pm
Consumer and business confidence is nose-diving ahead of the federal election with growing concern the economy will struggle this year and push up unemployment.
Amid a fresh warning about tightening credit conditions and Australia's high level of debt, the ANZ-Roy Morgan weekly measure of consumer sentiment dropped by almost 5 per cent to its lowest level since mid-2017.
Consumers' concern about their own future financial position increased while sentiment about economic conditions dropped by 8 per cent.
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RBA warns of 'abrupt, disorderly' effects of climate change
Updated Mar 12, 2019 — 6.26pm, first published at 6.18pm
Reserve Bank deputy governor Guy Debelle has called for immediate action on climate change to avert an "abrupt, disorderly" economic transition, in a speech that confirmed climate change policy as one of the central bank's key priorities.
In a speech on Tuesday, Dr Debelle said climate change posed a "systemic risk" to the Australian economy and would make new demands of monetary policymakers.
The speech paid particular attention to macroeconomic modelling, which Dr Debelle said had failed to adequately factor in the economic effects of climate change.
He said immediate action by regulators, business and government could mitigate the effects of climate change, which he said could include a "close to permanent" supply shock as extreme weather became more common.
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Big spending politicians ignore economic storm clouds
Updated Mar 12, 2019 — 11.08pm, first published at 11.00pm
The outlook for global economic growth has become decidedly bleaker over the past few months, but you'd never know it from listening to our politicians, who appear determined to ignore the gathering storm clouds as they head towards the polls.
Instead, politicians on both sides are trying to convince the electorate that the economy will run on autopilot for the next few years, without the need for some tough decisions as the global backdrop darkens.
Certainly, neither side of politics wants to run the risk of scaring voters by proposing policies aimed at boosting productivity, or improving competitiveness. They prefer to dwell on more pleasant subjects, such as tax cuts and lifts in spending.
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Big franchise report set to turn industry on its head
By Adele Ferguson
March 13, 2019 — 12.00am
There have been a number of false starts in the release of a parliamentary report into the $170 billion scandal-ridden franchise sector but unless something goes wrong it is all systems go for Thursday.
The report is being touted as a “big” report by those in the know and the many delays in its release have been blamed on getting unanimous support from all committee members, which is chaired by Liberal MP Michael Sukkar.
If it drags on much longer, Sukkar may need to bite the bullet and offer any dissenters the option of including a minority report.
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Over-50s will punish Labor if retirement numbers don’t add up
GRAHAM YOUNG
- 12:00AM March 13, 2019
Retirement income and savings policies could be deciding factors in this coming federal election.
Forty-eight per cent of the seats in parliament have a median voter age of 50 years or older. Twenty-five of those seats can be classified as marginal, with 10 held by the Liberal Party, 10 by the ALP and five by the Nationals. On the AEC definition, there are 47 marginal seats in Australia.
At the age of 50, men can expect to live to 83.1 years, and women to 86.1. Make it to 65 and life expectancy increases to 85.1 and 87.5.
That’s about 20 years living off your savings, which makes for a risk-averse cohort for whom adverse changes to rules around retirement and savings can mean a wasted lifetime of misdirected labour and financial strategy.
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Consumer sentiment index at 18-month low
- AAP
- March 13, 2019
Sentiment among Australia’s consumers has fallen to its lowest level in 18 months and pessimists now outnumber optimists, according to a monthly survey.
The Westpac-Melbourne Institute Index of Consumer Sentiment fell 4.8 per cent to 98.8 in March from 103.8 in February, slipping below the 100-point mark that separates optimism from pessimism.
Westpac senior economist Matthew Hassan said sentiment deteriorated after the release of GDP data that showed the Australian economy was growing more slowly than expected by the Reserve Bank.
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https://www.afr.com/markets/will-the-next-financial-crisis-be-as-bad-as-the-last-one-20190313-h1cbvj
Will the next financial crisis be as bad as the last one?
Updated Mar 13, 2019 — 5.03pm, first published at 12.00am
The world has borrowed an extra $US66 trillion since 2008, when a global financial meltdown triggered a "great recession" in the United States and brought the world economy down.
The total global debt pile sits at $US178 trillion ($252.2 trillion) as at the middle of last year, an increase of almost 60 per cent over the decade.
Big numbers make good headlines, but a more meaningful measure is the ratio of global debt to gross domestic product, and that is also up on a decade ago: to 234 per cent as at June 2018, versus 208 per cent in 2008.
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High Court's Timber Creek ruling the biggest native title decision since Mabo
Updated Mar 14, 2019 — 7.39am, first published at Mar 13, 2019 — 6.28pm
The Ngaliwurru and Nungali peoples may have lost $800,000 since the initial trial verdict in the Federal Court, but Indigenous people would realise they gained something of much greater lasting value – the imprimatur of the High Court on cultural loss.
The Northern Territory and the Commonwealth argued the damages for this non-economic loss should be limited to $230,000. But with its unanimous decision to approve a $1.3 million payout, the High Court has confirmed the impact is lasting – and worth significant sums of money.
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Bounded engagement: charting a new era in Australia-China relations
Bates Gill
Mar 14, 2019 — 10.15am
It has to be said, but few wish to: we are transitioning to a new and more difficult era with China. Laden with contradictions even in the best of times, it is clear Australia-China ties will become more challenging in the years ahead. We can expect the parameters of the possible for Australia-China relations to steadily narrow as each side rethinks the value proposition of the relationship. In short, we should be preparing for a protracted period of "bounded engagement".
Neither side can afford to close off the relationship. Engagement remains in our best interests. But the setting in which engagement occurs will be less expansive and open-ended than in the past.
The question for Australians is, what should "bounded engagement" look like? In this more constrained atmosphere, what should be the rules of engagement with China to best realise Australian values and interests? Where are opportunities for engagement in this environment and where are the risks?
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Hot button issue: 'Landmines in the lounge room,' says ER doctor
By Julie Power
March 14, 2019 — 12.01am
Unsafe products - ranging from potentially deadly button batteries to exploding hover boards - kill two people and injure 145 others a day, the chair of the Australian Competition and Consumer Commission (ACCC) Rod Sims will tell consumer groups on Thursday.
Together with consumer groups and doctors, the ACCC will call for a new law - a general safety provision - that would make it illegal to sell unsafe goods in Australia.
Consumer advocacy group, CHOICE, is calling for a crackdown on manufacturers and retailers as part of a campaign to highlight the danger of button batteries.
It is not against the law in Australia to sell unsafe goods, writes Mr Sims in an opinion piece in Thursday's Herald foreshadowing the ACCC's annual congress.
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Parliamentary inquiry calls for total overhaul of 'exploitative' franchise sector
By Cara Waters and Adele Ferguson
March 14, 2019 — 10.33am
The parliamentary inquiry into the $170 billion franchising sector has called for a total overhaul of Australia’s franchising system in a damning report released on Thursday.
The bipartisan report calls for new laws, greater enforcement powers and penalties for the regulator and a suite of changes to the franchising code.
It says the current regulatory environment has "manifestly failed to deter systemic poor conduct and exploitative behaviour and has entrenched the power imbalance".
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As an ex-coal boss, I'm telling politicians: wake up to climate threat
By Ian Dunlop
March 14, 2019 — 12.00am
Human-induced climate change is happening faster than officially acknowledged. Extreme events intensify, particularly in Australia, Asia and the Pacific. Victoria and Tasmania are ablaze again. Queensland needs a decade to recover from recent floods. Much of south-east Australia has become a frying pan, curtailing human activity.
The economic and social cost is massive – as Reserve Bank deputy governor Guy Debelle warned us this week – but too many of our leaders refuse absolutely to acknowledge climate change as the cause.
Given the overwhelming evidence and repeated warnings of the dangers we face, even as a former oil, gas and coal industry executive I find it incomprehensible that proposals for new fossil fuel projects proliferate, encouraged by government and opposition alike: Adani’s Carmichael, Glencore’s Wandoan, Kepco’s Bylong, Whitehaven’s Maules Creek, Shenhua’s Watermark, along with 20 other NSW coal projects, Shell’s CSG and LNG expansion, Northern Territory and West Australian fracking, Statoil in the Great Australian Bight, HELE coal-fired power stations ... the list goes on.
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'Brain explosion': Woodside, Canavan pile on WA government to dump EPA guidelines
By Cole Latimer and Hamish Hastie
March 13, 2019 — 8.17pm
Woodside and Federal Resources Minster Matt Canavan have blasted new emissions rules in Western Australia as analysts warn the policy could delay major LNG projects and a deliver wider hit to the gas industry worth up to $US10 billion ($14.2 billion).
The WA Environmental Protection Authority announced new guidelines earlier this month that would require all operations with direct carbon emissions above 100,000 tonnes a year to offset them through environmental projects.
The guidelines are not legislation and the EPA's recommendations can be ignored by the state. WA Premier Mark McGowan has told parliament he would reject them but Mr Canavan and the industry want him to go further.
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Global slowdown is becoming more intense - and no one knows why
By Stephen Bartholomeusz
March 13, 2019 — 7.30pm
One of the great post-crisis conundrums has been why, with interest rates at historic lows, debt and deficits at historic highs and, in some developed economies, unemployment at their lowest levels for decades, economic growth, inflation and wages growth have remained so stubbornly weak.
Recent US economic data illustrates the question.
US economic growth has been quite strong, in a post-crisis context, at 2.9 per cent in 2018 and, more recently, around 2.6 per cent. The US 10-year bond rate is 2.6 per cent and the two-year rate 2.5 per cent. The Federal Funds rate ranges between 2.25 per cent and 2.5 per cent. US government fiscal settings are highly expansionary, with deficits approaching $US1 trillion ($1.4 trillion).
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We need a law against risky goods (that's right, we don't have one)
By Rod Sims
March 14, 2019 — 12.00am
It not against the law to sell unsafe products in Australia. Unlike Canada, the United Kingdom, the European Union, Singapore, and Malaysia, there isn’t legislation preventing the supply of dangerous products on our shelves.
Most Australians are shocked to learn of this. They expect the products they buy not to cause them harm.
But the reality is this: our product safety regime is out of step and we are lagging behind. It’s time for that to change.
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RBA could blow bubble back up
Mar 15, 2019 — 10.31am
If only the RBA had its brilliant new research on the impact of interest rates on house prices back in 2013 when this column warned them that their easy money policy would blow a huge housing bubble, as it subsequently did.
We have long argued that the RBA made a major forecasting error when it slashed its target cash rate from 4.75 per cent to 1.5 per cent and repeatedly assured the public that this would not fuel double-digit house price growth nor a sharp re-leveraging of household debt, which is precisely what happened.
While the RBA does not target house prices with its monetary policy settings, it is obliged not to amplify financial stability risks. And it is this part of its official mandate that it failed miserably between 2013 and 2017.
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Apartment buyers could face a 20pc fall in valuation in upcoming settlements
Mar 14, 2019 — 11.00pm
Buyers of off-the-plan apartments could be "out of the money" by as much as 20 per cent as settlement falls due in coming months, raising the risk of greater defaults, according to UBS analysts.
The issue of settlement and apartment values has now become acute for those buyers who contracted for off-the-plan apartments at the peak of the market around 2016 and 2017.
With prices falling and banks' tougher stance on borrower scrutiny, fresh valuations ahead of loan approvals for settlement could sink as much as 20 per cent below original off-the-plan purchase prices, according to UBS.
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https://www.afr.com/news/economy/its-every-man-for-himself-in-sinking-coalition-ship-20190313-h1cbda
It's every man for himself in rush to Coalition lifeboats
While the Coalition tears itself apart, Labor is having to remind itself that it has not won the election yet.
Mar 14, 2019 — 8.00pm
In late November, on the back of the panic stirred by the Victorian state election, this column observed the federal government was close to the point of "every man for himself".
That's the point when all hope is lost and MPs, driven by anger or the need to save their seats, safeguard their legacy or position themselves for the aftermath, throw any remnants of discipline to the wind and start freelancing.
On Monday this week, the mad dash for the liferafts on the back of a morale-crushing Newspoll indicated the point had been reached.
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Government spending bonanza gives RBA breathing room on rates
By Michael Heath
March 15, 2019 — 11.23am
Australia's economy is set for a fiscal injection as the Coalition government, trailing in opinion polls ahead of the election in May, tries to buy its way back into contention.
The expected spending bonanza in the April 2 budget will be well received by the nation's heavily indebted households. It may also win favour in a more unlikely quarter: the traditionally buttoned-down, inflation-fighting Reserve Bank, which is keen to avoid resuming interest-rate cuts.
RBA Governor Philip Lowe is under intensifying pressure to end a 2-1/2 year pause in rate cuts as tumbling house prices spook households and slow economic growth.
But with rates already at a record low, the impact of further easing might prove limited. In contrast, well-directed tax cuts and cash disbursements could be just the stimulus the economy requires.
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Gunman opens fire at Christchurch Mosque
March 15, 2019 — 12.32pm
A gunman has reportedly opened fire in the Christchurch Mosque in New Zealand.
The former president of the Muslim Association of Canterbury, Mohammed Jama, said a man with a gun went into the mosque about 1.40pm on Friday.
He saw about four people injured and two lying on the ground. He did not know if they were alive or dead.
A photographer said he could see three seriously injured people on the doorstep of the mosque.
In a statement, police said they were responding to reports of shots fired in central Christchurch.
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Why the RBA spoke up on climate change
Updated Mar 15, 2019 — 5.19pm, first published at 12.00am
When Reserve Bank of Australia deputy governor Guy Debelle broke new ground for the institution this week by publicly warning of the economic dangers posed by climate change, he did so after extensive internal deliberations inside the central bank.
The economic and financial impacts of climate change have increasingly been exercising the minds of monetary policy makers in recent years and Debelle felt it was time for the independent RBA to speak out.
In doing so Debelle was underlining that climate change is not simply a topic for scientific and political debate, but that the central bank believes it has real and permanent consequences for the economy, business and financial markets.
So why did he speak out so forthrightly on such a fraught political issue that is once again tearing apart the Coalition government and has cost at least three prime ministers their jobs?
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The existential pain of falling household wealth
Mar 15, 2019 — 11.00pm
Falling housing wealth will surely reverberate around the economy in ways that few can anticipate.
Hundreds of thousands of properties in Sydney and Melbourne are worth less than their purchase price, as revealed by exclusive CoreLogic analysis provided to AFR Weekend.
For example, Sydney property values have dropped 13 per cent since peaking in July 2017. Since that time there have been over 140,000 sales where, notionally, the owner paid more than the house is now worth. So if you bought at the peak for $1 million, the CoreLogic index suggests your place is now worth $870,000.
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Companies prepare for an AI-powered future
Mar 15, 2019 — 11.00pm
The Qantas operations centre at Mascot, alongside Sydney Airport, is buzzing with operations controllers, cabin crew representatives, teams of engineers and meteorologists. Every Qantas plane anywhere in the world can be seen on their screens.
Invisible to passengers, this floor is the beating heart of Qantas' global operations. From these banks of computers, the pilots of each international aircraft receive their instructions and flight plans, based on live monitoring of global airline traffic and weather patterns. And powering the new flight planning system is artificial intelligence technology.
New technology, which allows machines to recognise patterns and derive insights by processing massive amounts of data, is being rolled out by companies around the world, including some of the biggest in Australia. The arrival of AI is being driven by sharp growth in organised data sets, rapid advancements in algorithms and cheap and ubiquitous computing power.
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When elite institutions unravel, it's not enough to cite populism and move on
Mar 15, 2019 — 11.00pm
It's been an extraordinary week. Words like "unprecedented", "turmoil", "crisis" and even "unhinged" flow like lava amid Britain's Brexit eruptions, the jailing of Cardinal George Pell over sexual abuse convictions, and the leadership catfight in the Coalition's junior partner, the National Party.
Regarding the latter, Prime Minister Scott Morrison unintentionally chanced upon the nub of the matter when he compared his working relationship with Nationals leader Michael McCormack to that of Sir Robert Menzies and John "Black Jack" McEwan in the Coalition heyday of the 1950s. Morrison's comment came after a nasty public spat as former deputy prime minister and onetime Nationals' leader Barnaby Joyce positioned himself for another tilt at the Nationals' leadership.
For the walking wounded in an already split Coalition, the significance of Morrison's reference is not that Menzies and McEwan formed a politically dominant partnership during Australia's post-war boom years, but that their determination to achieve this unity of purpose was forged in a similarly split Coalition Government in 1939-41, when Menzies gained and then lost the prime ministership for the first time.
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How climate change will affect your mortgage
By Jessica Irvine
March 16, 2019 — 12.00am
In ordinary times, a person standing up to make a statement of the bleeding obvious isn’t news.
But the times, my friends, are anything but ordinary.
And in these times, when a person stands up and says climate change will have an inevitable impact on our economy, that is news.
And when that person happens to be the deputy governor of the Reserve Bank, that is headline-making stuff indeed.
Guy Debelle's speech this week on "Climate Change and the Economy" is significant, representing the first serious foray by our central bank into the policy implications of climate change.
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'The most dishonest thing would be to say that I'm shocked'
By Waleed Aly
March 16, 2019 — 8.29am
On Friday night, writer and television co-host Waleed Aly spoke on The Project about the mass shootings at two mosques in New Zealand.
The clip has been shared tens of thousands of times and viewed over a million times.
Here is a transcript of what he said.
You’ll have to forgive me, these won’t be my best words. The truth is, I don’t want to be talking today. When I was asked if it was something I wanted to do, I resisted it all day until finally I had this overwhelming sense that it was something in my responsibility to do so and maybe that’s misguided.
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Five initial thoughts on the New Zealand terrorist attack
Daniel L. Byman Friday, March 15, 2019
The terrorist attacks on the Al Noor and Linwood mosques in New Zealand, which so far have killed 49 people and led to dozens more injuries, are only the latest in anti-Muslim right-wing violence that is plaguing many democracies around the world. The terrorist was apparently an Australian who traveled to New Zealand to send a message to Muslim migrants that no place is safe.
We should be careful about rushing to judgment on any of the particulars as some of our initial information is undoubtedly wrong, and so much is incomplete. However, here are some of my initial thoughts as we learn more about this horrific violence.
First, words have consequences. The demonization of Muslim communities, often by politicians who later act shocked and angry when violence occurs, contributes to societal polarization and inspires violence. Britain’s Boris Johnson offered the traditional “thoughts and prayers” after the attack, but had previously written that women dressed in a burqa look like “bank robbers.” Incredibly, after the shooting, right-wing Australia Senator Fraser Anning claimed, “The real cause of bloodshed on New Zealand streets today is the immigration program which allowed Muslim fanatics to migrate to New Zealand in the first place.” Terrorists feed on this polarization and seek to worsen it.
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Extremist hatred fuels a massacre designed to horrify
Mar 16, 2019 — 8.16pm
The wounded tried to crawl away or lie still, while others ran or crouched behind the dead, but the gunman kept pulling the trigger.
He shot fleeing women and girls, and pumped bullet after bullet into piles of motionless men and boys in a house of worship.
The man accused of carrying out the worst mass murder in New Zealand's modern history, one that left 49 people dead and more than 40 others wounded at two mosques in Christchurch, was identified in court documents Saturday as Brenton Harrison Tarrant, 28. The suspect, who officials said is an Australian citizen, was charged with one count of murder, and more were expected to come.
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The end of the property boom: Is the worst still to come?
By Shane Wright and Eryk Bagshaw
March 16, 2019
To some it's a bloodbath in the making. Others see it as a simple correction. But all agree Australia's property boom is well and truly over.
Every day there are Melbourne and Sydney property owners who put houses and units up for sale in the hope they can quickly find a buyer and the dream of the new owner offering a high price.
But in a sign of the downturn in both markets, more than 8000 of those who entered the market in March of last year are still waiting.
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Far-right racists want to destroy open societies
By Ed Husain
March 17, 2019 — 12.00am
I visited Christchurch, New Zealand last year and met with ordinary Muslim shopkeepers, waiters, and students. While there, I also visited the home of Karl Popper, the Austrian Jewish author who fled Hitler and, in Christchurch, wrote his liberal masterpiece The Open Society and Its Enemies. Popper praised New Zealand, but more importantly saluted the laws, languages, and liberties of a nation that stood tall against Nazism.
We now face a new threat to our open societies. Yesterday's purely evil terrorist attack in which at least 49 innocent worshippers were killed at their mosques was the latest horror perpetrated by far-Right racists.
The suspect, a white man in his late 20s, took two years to plan the killings, but laid out in his "manifesto" the six years of reading, travelling, thinking and conversing with other racists that led to his decision to kill Muslims. The manifesto reads like a new version of Mein Kampf. Nazism is alive in our midst and we must be vigilant against it.
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Economy, small business may be hit by housing slump: Treasurer
By Eryk Bagshaw and Shane Wright
March 17, 2019 — 12.05am
Treasurer Josh Frydenberg has raised fears the property downturn in Sydney and Melbourne could flow into the broader economy, hitting small businesses that have taken out loans on the value of their family home.
The comments, in an interview with The Sunday Age and Sun-Herald in Canberra, a fortnight out from his first budget mark a shift from the top levels of the Morrison government which has prided itself on using a "scalpel" to treat over-heating housing markets but now faces price falls largely beyond its control.
"Now the issue is different," said Mr Frydenberg. "People are concerned about the impact of lower prices on the future of the real economy and particularly that spill-over into household consumption and into the ability of small business to grow and expand and invest."
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This is your captain computing: 737 MAX crashes put heat on autopilots
By Patrick Hatch
March 16, 2019 — 12.05am
It's not every day that experts in their field agree with what United States president Donald Trump posts on Twitter.
But it happened in a small way this week, when the president weighed into the crisis engulfing US aeroplane maker Boeing, after one of its 737 MAX 8 aircraft flown by Ethiopian Airlines crashed outside of Addis Ababa killing 157 people on Sunday.
Two 'black box' recorders have been recovered from the site of an Ethiopian Airlines passenger jet that crashed after take-off on Sunday, killing all 157 people on board. Boeing shares slid 9 per cent and a minute's silence was held at a UN assembly
"Pilots are no longer needed, but rather computer scientists," Trump wrote, adding a flourish that hit on a hot topic in aviation circles: "I don't want Albert Einstein to be my pilot. I want great flying professionals that are allowed to easily and quickly take control of a plane!"
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That camera was, arguably, one of his most powerful weapons
By Ellie Zolfagharifard
March 16, 2019 — 3.10pm
It was just before 2pm local time when the Christchurch shooter opened fire at a mosque in Christchurch, New Zealand.
Strapped to his head was a camera that live-streamed every terrifying moment of his attack to millions of people around the world.
That camera was, arguably, one of his most powerful weapons. This was a man who knew how to exploit the online system and did so to devastating effect.
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Notoriety in dark-web communities heralds new era for terrorism
By Catharine Lumby
March 16, 2019 — 1.45pm
When Osama bin Laden orchestrated the September 11 attacks to inflict maximum damage and terror on the US and its allies, he not only took the engineering of the World Trade Centre towers and the fuel loads of the planes into account. He also factored in the media’s capacity to send those images around the world and sear them into our memories.
The attacks took place in prime viewing time. They were staged on a cloudless late September morning at a location close to one of the most concentrated media hubs in the Western world: Downtown Manhattan.
Nearly two decades later, terrorists no longer need the services of the mainstream media to document and broadcast their hate-fuelled crimes. With the aid of the internet and live video-streaming tools they can do it themselves. Which is precisely what the man who has been charged in the Christchurch terror attack did.
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Outdated financial products leave consumers trapped
By John Collett
March 17, 2019 — 12.00am
Almost 2.5 million Australians are trapped into paying higher costs than they should on outdated financial products — such as life insurance, managed funds and superannuation — due to complexity and a lack of tax relief.
The Financial Services Council, which represents retail super funds, fund managers, life insurers, and financial advice providers, wants next month’s federal budget to include measures so that their members can more easily close "legacy" products and roll them over into modern versions of their offerings.
The problem of legacy products is particularly acute in superannuation.
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Tarrant's descent from country town underachiever to accused assassin
By Tim Barlass and Sarah Keoghan
March 17, 2019 — 12.00am
What turned a schoolboy with, in his own words, a regular childhood and little interest in education into the 28-year-old accused of the worst mass murder perpetrated by an Australian?
Brenton Tarrant on Saturday appeared in the Christchurch District Court charged with murder over the massacre of 50 people at two mosques in Christchurch.
The appearance was brief but time enough for Tarrant to flash a white power symbol in court. No application for bail was made and Tarrant was remanded in custody without plea to the High Court in Christchurch on April 5.
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Royal Commissions And Similar.
Banks have funny way of showing they're sorry for fee-for-no-service scandals
Mar 11, 2019 — 2.27pm
The banks keep saying how sorry they are for the fee-for-no-service scandal that has helped rip apart the community's faith in the sector.
But just how sorry are they, really?
That's the key question raised by a stinging report card on the efforts of AMP, ANZ, Commonwealth Bank, Macquarie, NAB and Westpac to fully fix their fee-for-no-service problems.
The banks have been slammed by ASIC for delaying their response to the fee for no service scandal.
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Will the big industry funds fall into the AMP trap?
Mar 11, 2019 — 11.00pm
It's the big question facing the industry super funds such as AustralianSuper, UniSuper and REST: can they continue to enjoy exponential growth yet still manage to avoid the AMP trap?
Back in the early 1990s, the Sydney-based wealth manager was so large and so dominant in the local sharemarket that it found it near-impossible to generate strong investment returns.
Whenever AMP decided it wanted to increase, or reduce, its exposure to a certain company, rival fund managers knew immediately that the guys down at Circular Quay were active in the market.
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Labor to back a single default superannuation fund
Updated Mar 12, 2019 — 4.59pm, first published at 4.49pm
Labor is committed to the banking royal commission's idea of "stapling" a default superannuation account to people as they move jobs, says the shadow financial services minister Clare O'Neil.
"We're committed to stapling. Exactly what that looks like, I'm not sure. But certainly, we do need to abide by his recommendation and move away from the incredibly problematic issue with superannuation today, which is the issue of this multiplicity of accounts," Ms O'Neil said after a speech to the Committee for Sydney on Tuesday.
Commissioner Kenneth Hayne said in his final royal commission report that default arrangements in the best interests of members are essential because some employees, especially those who are young and working part-time, do not make informed choices about their superannuation arrangements. Stapling would only apply to new workers or existing workers without accounts.
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Maggots in man's head wound at NSW aged care facility
March 12, 2019 — 6.19pm
An elderly resident in an increasingly substandard NSW aged care facility has been hospitalised after maggots were found in his head.
The disturbing discovery comes months after Bupa's Eden facility was sanctioned by the government because residents were at "immediate and severe risk".
Federal Aged Care Minister Ken Wyatt said it was "totally unacceptable and concerning" the south coast facility had a resident with maggots in a wound so quickly after it was inspected by the newly beefed-up regulator the Aged Care Safety and Quality Commission.
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Government ditches Hayne recommendation on mortgage broker pay
By Sarah Danckert
March 12, 2019 — 5.00pm
The federal government has ditched a key recommendation from the banking royal commission to scrap trail commissions for new loans arranged by mortgage brokers after pressure from the industry and smaller lenders.
The mortgage broker industry, which had warned that many brokers would go out of business if the Hayne recommendation was approved, cheered Treasurer Josh Frydenberg's announcement on Tuesday that the government would now review trail commissions in three years if it remains in government.
Commissions paid to mortgage brokers was one of the key focus areas for the royal commission, with commissioner Kenneth Hayne recommending in his final report that commissions to brokers be axed and replaced by an upfront fee.
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Mortgage broker debate is everything that is wrong with our democracy
By Jessica Irvine
March 13, 2019 — 3.53pm
I've been writing weekly opinion columns for long enough now to know one of the secrets to good opinion writing lies in 'elegant variation'. (Another is to avoid excessive use of the personal pronoun, but hey; some rules were made to be broken).
A good columnist, adhering to the rule of "elegant variation", should continually dazzle his or her reader with a seemingly never-ending array of interesting topics: childcare one week, climate change the next, and so on.
"Keep banging on about one thing, and you'll lose 'em," the accepted wisdom goes.
But these are special times. And I'm in a rule-breaking mood.
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Aussie banks can afford $12 billion Kiwi safety net, says RBNZ
By Clancy Yeates
March 14, 2019 — 12.00am
The Reserve Bank of New Zealand has mounted a firm defence of its plan to force Australia's major banks to hold $NZ12.5 billion ($A12.12 billion) more in capital in their banking operations across the Tasman, saying the "highly profitable" businesses would have to accept lower returns.
In an interview on Wednesday, RBNZ deputy governor Geoff Bascand also justified the plan to bolster bank balance sheets by emphasising the social costs of banking crises and arguing New Zealand could not rely on Australian parent companies for a bail-out in severe shock.
The RBNZ's surprise proposal to make the big four's Kiwi businesses build larger capital buffers, announced in December, has been a key drag on the share prices of the big four banks in recent months.
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New aged care funding model hailed as “game changer”
- 2:32PM March 15, 2019
A report recommending a radical overhaul of the aged care funding system, released by the Coalition on Friday, would force nursing homes to take residents without knowing their cost classification and help the government reject calls for mandatory staff-to-patient ratios.
The study, commissioned by Aged Care Minister Ken Wyatt and authored by the University of Wollongong’s Australian Health Services Research Institute, recommends individual residents be split into 13 cost classes based on their mobility and a separate tariff be paid to all nursing homes for costs that are shared across all occupants of a facility.
The results of the study, first revealed by The Australian last month, show those with the highest needs will receive 75 per cent more funding than the current model provides, while some people in the medium-to-high categories will receive close to double.
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Elderly Australians dying while they wait for in-home aged care
By Farrah Tomazin
March 17, 2019 — 12.01am
Almost 128,000 Australians who have been approved for in-home aged care are still waiting for the support they need, with funding taking so long that some people have died before before they receive any money.
New government figures show that most people are waiting at least 12 months before they get the level of care they require, and also reveal that the number of older people in the queue has blown out significantly, with 23,000 more people than last year.
The ever-growing demand is the latest challenge to the Commonwealth’s Home Care Package scheme, which provides older people with needs-based subsidies ranging from $8248 to $50,148 a year, to be used on anything from help with showering or cooking, to social outings and medical aids.
The taxpayer-funded scheme is designed to ensure more people can remain at home as they get older, thereby delaying or avoiding a move to a nursing home.
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National Budget Issues.
No end in sight for credit squeeze
Updated Mar 12, 2019 — 1.51pm, first published at 12.49pm
The banking royal commission is over but its negative effects on home lending are living on, so the credit squeeze for the economy will persist, says one of the country's most senior bankers.
Lending to households declined 2.4 per cent in January after a 3.6 per cent slump in December, the Australian Bureau of Statistics said on Tuesday. Home lending has fallen more than 20 per cent in the last year, the biggest annual decline since the 2008 global financial crisis.
Speaking frankly and anonymously, a senior banker says pressure from the Hayne royal commission and electioneering politicians for the Australian Securities and Investments Commission (ASIC) to get tough on banker misconduct is making frontline branch staff cautious about approving credit for home borrowers and consumers.
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https://www.afr.com/personal-finance/record-16bn-windfall-to-inflame-franking-debate-20190311-h1c8rn
Record $16b windfall to inflame franking debate
Updated Mar 12, 2019 — 11.22pm, first published at 11.00pm
Investors are sharing a record $16 billion of franking credits from the latest earnings season, boosting income across all tax brackets and fuelling an increasingly bitter debate about the possible axing of cash refunds by a future federal Labor government.
Franking credits distributed for the six months to the end of March jumped by about 45 per cent compared with the previous period following a bumper mix of special dividends and high ordinary dividends after a rebound in the S&P/ASX200 Index.
There has also been an increase in companies using off-market buybacks to return proceeds from asset sales.
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Health Issues.
The facts behind prostate cancer over-diagnosis
Mar 11, 2019 — 12.00am
It's well known the management of prostate cancer in Australia has been seriously flawed, but now researchers have discovered the extent of the flaw.
While 2012 was the most recent period analysed, they showed the lifetime risk of an Australian man being diagnosed with prostate cancer rose dramatically in the previous 30 years.
Their study, published in BMJ Open today showed in 1982, only one in 17 men were diagnosed. By 2012, this had risen to one in five.
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Health funds warn they will be on life support without premium relief
Mar 10, 2019 — 11.00pm
Health funds are warning membership rates will plummet to 30 per cent and some insurers will go out of business over the next decade unless urgent action is taken to reduce pressure on premiums and incentives to take cover are restored.
As the industry braces for disruption from the introduction of standardised "gold, silver and bronze" minimum levels of coverage on April 1, the health funds lobby group has cautioned Labor there is a danger private health care "retreats to a luxury market accessible only to wealthy Australians".
With hospital coverage declining over the past four years, Private Healthcare Australia chief executive Rachel David told The Australian Financial Review the health inflation rate – which can be as much as twice the Consumer Price Index inflation rate – coupled with tough economic conditions such as low wages growth is hurting funds ability to recruit and retain members.
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Health insurers battle public hospitals over $1b a year cash grab
By Colin Kruger
March 11, 2019 — 12.00am
Hospital patients are getting caught in the middle of a battle between public hospitals and private health insurers over who should pay for their treatment.
Health insurers claim the sector is being used as a cash cow for an underfunded public health system which is adopting aggressive tactics to push more patients to use their health insurance even if it offers no material benefit for them.
For some patients its as innocuous as the posters on the wall of the Royal Children's Hospital Melbourne inquiring "Do you have private health insurance?" and wooing them with the line that it will help support the hospital to "continue improving our patient services."
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Study finds 'no increase in opioid use' since codeine was made prescription-only
By Andy Park
11 March, 2019
The controversial move to make codeine prescription-only has had no effect on the rate of prescribed opioid use.
Key points:
- Study shows codeine prescriptions have not increased over the past three years
- In February 2018, the Government tightened access to codeine in an attempt to reduce opioid-related deaths
- Pharmacy Guild says its members have seen a rise in prescriptions
A study by Monash Addiction Research Centre has tracked opioid prescriptions across three years — two before the restriction and one after.
Its research shows that in the 12 months following the restriction, there was no increase in opioid prescriptions.
"When we looked at overall prescribing, so for weak opioids like codeine and strong opioids like oxycodone in Australia, those trends are actually coming down," Associate Professor Suzanne Nielsen told 7.30.
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Prostate tests find harmless cancers
- By Sean Parnell and Mackenzie Scott
- 12:00AM March 11, 2019
Almost half of all prostate cancers detected through common screening tests in Australia have been unnecessarily diagnosed, putting men through needless worry, treatment and expense.
Research led by Bond University, and published in the journal BMJ Open, found at least 41 per cent of prostate cancers detected through screening in Australia would have remained harmless if left untreated.
In Australia, the lifetime risk of being diagnosed with prostate cancer rose from 6.1 per cent in 1982 to 19.6 per cent in 2012, with a rapid increase following the introduction of prostate-specific antigen testing in 1989.
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Labor states want billions from a Shorten government
- 12:00AM March 12, 2019
Bill Shorten is walking into a political firestorm of Labor’s own making, with Queensland and Victoria demanding a return to the 50-50 hospital funding deal promised by Julia Gillard and worth billions more to the states.
For five years, the federal Labor opposition has accused the Coalition government of ripping billions of dollars from public hospitals after it tore up the Gillard deal and kept the federal contribution at 45 per cent.
However, with an election approaching, Labor was planning to keep the same formula if it took government. It has offered the states various capital upgrades through a Better Hospitals Fund costing $2.8 billion — which it suggested was the short-term difference between 45 per cent and 50 per cent — but has not offered to contribute more to the ongoing cost of service delivery.
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Is the official advice on salt wrong?
Jess Salter
Updated Mar 12, 2019 — 9.50am, first published at 9.45am
It is a diet "truth" that we're used to hearing: we eat too much salt and need to cut back. We know, thanks to ongoing public health campaigns - last week, for instance, was Salt Awareness Week - that a high-salt diet can lead to raised blood pressure that can lead to heart attacks and strokes, particularly in the over-50s.
In the UK, we have dramatically cut our intake from 11 to 12 grams a day 50 years ago to about 7g-8g a day now. But we still eat more than the World Health Organisation recommends: a paltry 5g a day of salt, or a single teaspoon, though the NHS suggests 6g a day.
What makes it harder to visualise is that most salt in the diet comes from processed foods, rather than a liberal sprinkling at the table.
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Analysis finds flaws in anti-vax thesis
- 12:00AM March 13, 2019
A number of citations contained in the PhD thesis of controversial anti-vaccination campaigner Judy Wilyman have been found to be “unrelated, incomplete or used completely out of context”, a newly published critical analysis of the dissertation has found.
The paper, published in the journal Vaccine, was an effort to deconstruct some of the sensationalist claims made in Dr Wilyman’s thesis for which she was contentiously awarded a PhD by the University of Wollongong in 2016.
These included that global agencies such as the World Health Organisation conspired with the pharmaceutical industry to spruik mass immunisation including by convening a “secret emergency committee” funded by drug companies to “orchestrate” hysteria over a potential swine flu pandemic in 2009.
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No easy fix for indigenous kidney transplant bias, says minister
- 12:00AM March 13, 2019
A major review has been unable to fully explain the systemic bias that sees fewer kidney transplants given to indigenous Australians and warned there was “no easy fix”.
Indigenous Health Minister Ken Wyatt released the findings of the review yesterday, and accepted its primary recommendations that more data be collected and reported, a new taskforce advocate for indigenous patients, and every transplant unit have an indigenous reference group.
“It is untenable that Aboriginal and Torres Strait Islander Australians in need are having kidney and organ transplants at only about 25 per cent of non-indigenous people,” Mr Wyatt said.
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https://www.australiandoctor.com.au/news/blinded-science-how-patients-are-fooled-cam-pathology-tests
Blinded by 'science': How patients are fooled by CAM 'pathology' tests
Review finds 11 tests commonly ordered by CAM practitioners lack clinical validity and utility
13th March 2019
Patients are increasingly being exposed to direct-to-consumer lab tests and ‘dubious’ alternative medicine tests that are costly and can even be harmful, pathologists warn.
A group of Australian and British pathologists have reviewed the evidence for 11 tests commonly ordered by complementary and alternative medicine (CAM) practitioners and found they lack clinical validity and utility (see box, below).
They say diagnostic testing is increasingly popular among CAM practitioners as technological advances have led to more in-house tests being developed by labs specialising in CAM tests.
Testing also “adds an element of science” to consultations and may justify the sale of supplements or therapies by the practitioner, the researchers say.
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Alzheimer's disease link to HRT downplayed
Women using long-term hormone therapy have a slightly higher chance of developing the neurodegenerative disease, say researchers
13th March 2019
An Australian expert has downplayed concerns from the largest study to date suggesting long-term use of hormone replacement therapy increases a woman’s risk of developing Alzheimer’s disease.
The Finnish cohort study looked at more than 80,000 postmenopausal women diagnosed with Alzheimer’s disease, matched with controls, over a 15-year period.
They found that women with Alzheimer’s disease had used systemic HRT slightly more often than those without the disease, 18.6% vs 17%.
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Growing weak at the knees? Here's what to do.
Jill Margo
Mar 15, 2019 — 9.30am
Australia is growing weak at the knees. These joints can hardly support the combined burden of a population that is not only ageing but is becoming heavier too.
And because Australia is such a sporting nation, old field injuries are now accelerating the deterioration of knees and adding to the burden.
A new study has shown there is likely to be a 276 per cent rise in knee replacement procedures from 2013 to 2030. This is based on data from Australia's joint replacement registry, which is one of the finest in the world.
For the past 16 years, the registry has detailed every knee, hip, shoulder, elbow and ankle implant performed across the country and is a rich source from which lessons are learnt and developments are planned.
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‘Staggering’ costs of brain disorder total
- 12:00AM March 15, 2019
The growing prevalence in brain disorders — which now afflict at least 43 per cent of the population — is costing more than $70 billion a year and rising, according to a landmark new study of the economic costs of a variety of neurological diseases.
More than 242,000 Australians were affected by Alzheimer’s and dementia in 2017, while 4.5 million experienced migraines, according to Mindgardens, an alliance of clinical researchers, which contributed to a loss in quality of life valued at $74bn.
“The costs are staggering,” said Professor Helen Christensen, chief executive of Mindgardens.
“Mental health disorders and suicide cost the nation over $33bn each year, neurological disorders cost over $31bn and substance use and disorders almost $10bn”.
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Scientists want firmer guidelines on genetic editing
- By Amy Dockser Marcus
- The Wall Street Journal
- 12:00AM March 15, 2019
An international group of researchers, including inventors of popular gene-editing tool Crispr, have called for a worldwide moratorium on editing DNA in human sperm, eggs and embryos to prevent births of genetically modified babies.
The group of 18 scientists said in a paper published in the journal Nature that a moratorium would prevent irresponsible use of the technology before it causes irreversible changes, especially after a researcher in China announced last November that he had produced the first genetically modified babies.
The reported births made it clear that “previous statements didn’t go far enough and they could go farther and now is the time to say so”, said Eric Lander, one of the lead authors of the paper.
Yet other scientists refused to join the call, showing that researchers disagree about how best to balance encouraging research into the technology’s potential while deterring irresponsible use.
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'Have you got insurance?': the US-style question finding its way to Australian hospitals
By Colin Kruger
March 16, 2019 — 12.00am
“Have you got insurance?” It is the first question faced by any patient walking into a hospital emergency room in the United States and is seen as emblematic of a health system that does not serve those who cannot pay.
So why is this question being raised, with increasing frequency, in the emergency rooms and hospital wards of Australia’s highly regarded medical system?
In a warped reversal of the US system, it is actually patients who do have private health insurance who potentially face a nightmare when they enter hospital.
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International Issues.
Evidence mounts that Kim welched on Trump deal
David E. Sanger and William J. Broad
Mar 10, 2019 — 11.00pm
Washington | President Donald Trump was forced to publicly acknowledge this past week what US intelligence officials said they had long been telling the White House: Even during eight months of blossoming diplomacy, Kim Jong-un, the North Korean leader, was steadily adding to his weapons arsenal and nuclear infrastructure.
Three times, Trump told reporters that he would be "very disappointed" if North Korea was preparing to launch a space rocket that intelligence officials believe could help Kim perfect the means to heave a nuclear warhead across the ocean. Satellite imagery taken Friday, and analysed by the Beyond Parallel program of the Centre for Strategic and International Studies, shows that the North has "continued preparations" on the launch pad at Sohae consistent with readying for "the delivery of a rocket."
US officials said the reconstruction there began long before Trump left Washington in late February for a summit with Kim in Hanoi, Vietnam, where talks abruptly ended.
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US airstrikes kill hundreds in Somalia, anti-militant effort surges
March 11, 2019 — 9.21am
Washington: The US military has escalated a battle against al-Shabab, an extremist group affiliated with al-Qaeda, in Somalia even as President Donald Trump seeks to scale back operations against similar Islamist insurgencies elsewhere in the world, from Syria and Afghanistan to West Africa.
A surge in US airstrikes over the last four months of 2018 pushed the annual death toll of suspected al-Shabab fighters in Somalia to the third record high in as many years.
Last year, the strikes killed 326 people in 47 disclosed attacks, Defence Department data show.
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EU ready to charge $2 billion a month for Brexit delay
By Gordon Rayner
March 11, 2019 — 10.05am
Brussels: The EU is preparing to charge Britain billions of pounds and impose a number of other punitive conditions as its price for agreeing a Brexit delay if Theresa May is forced to ask for an extension this week.
Member states are "hardening" their attitudes towards a delay and will demand "legal and financial conditions" including a multi-billion pound increase to the £39 billion ($71 billion) divorce payment, The Daily Telegraph has learnt.
Sources said Britain would be expected to pay another £13.5 billion per year, ($2 billion a month) with a delay of even three months adding billions to the bill.
Norwegian sovereign wealth fund energy move hits ASX
Beach Energy’s operations in the Victoria’s Otway basin. Picture: Supplied.
- March 11, 2019
Moves by Norway’s huge sovereign wealth fund to start limiting its exposure to fossil fuels reverberated through the ASX on Monday, with major energy stocks taking a belting.
The energy sector accounted for about a quarter the day’s losses at lunch, taking 5.45 points off the index as the ASX 200 traded 19.961 points or 0.32 per cent lower at 6183.8.
Beach Energy was one of the worst performing stocks in the ASX 200 around lunchtime after Norway’s sovereign wealth fund announced at the weekend that it would move to reduce its exposure to energy explores and producers.
Norway’s sovereign fund is the largest in the world with $US1 trillion ($1.42tn) in investments.
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Boeing 737 MAX 9 airspeed readings back in focus
Robyn Ironside
Wreckage from the Ethiopian Airlines Boeing 737-MAx was scattered over a wide area. Picture: AP.
• March 11, 2019
The deadly crash of Ethiopian Airlines’ flight 302 will raise more questions about the safety of the Boeing 737 Max 8 aircraft involved.
Although it is too early to speculate on the cause of the crash, the similarities between the disaster and that of Lion Air flight 610 last October cannot be ignored.
For a start, both incidents involved near new Boeing 737 Max 8 aircraft. The Ethiopian Airlines’ aeroplane had only been delivered in November and was one of five in the company’s fleet.
Like the Lion Air incident, the pilot of Ethiopian Airlines flight 302 experienced problems shortly after take-off from Addis Ababa and requested to return.
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Global economy hits weakest spell since the financial crisis
By Fergal O'Brien
Updated March 12, 2019 — 10.50amfirst published at 10.10am
The global economy's sharp loss of speed through 2018 has left the pace of expansion the weakest since the global financial crisis a decade ago, according to Bloomberg Economics.
Its new GDP tracker puts world growth at 2.1 per cent on a quarter-on-quarter annualised basis, down from about 4 per cent in the middle of last year. While there's a chance that the economy may find a foothold and arrest the slowdown, "the risk is that downward momentum will be self-sustaining," say economists Dan Hanson and Tom Orlik.
The reasons for hope? The Federal Reserve's decision to pause its interest-rate hikes, a US-China trade truce and the fading of the shocks that battered Europe in 2018 could mean stabilisation is around the corner. Other central banks have also stepped up, with the European Central Bank last week announcing new measures to help the economy through the current weakness.
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The caliphate is dead. For now
By Peter Hartcher
March 12, 2019 — 12.00am
It began on the weekend. It's expected to be the final assault. Even if it proves to be one of several final assaults, the very last vestiges of the so-called "caliphate" are about to be wiped out. A few years ago the caliphate covered an area the size of Britain, measured in tens of thousands of square kilometres. Today it's last fighters defend an area the size of a suburban shopping mall, down to its final hundreds of metres.
The barbarians of Daesh, who prefer us to honour them with the title of Islamic State, established their killers' kingdom in anticipation of the glorious Koranic End of Days when they would vanquish the evil unbelievers for all time. Instead, it is their caliphate facing the end of its days. Daesh's third-world theocracy is dying with the same nobility in which it was born - the remaining fighters reportedly are using civilians as human shields.
The infant son of Shamima Begum, a British teenager who left London to join the Islamic State group in Syria, has died.
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It's Brexit crunch week: Here's your explainer on what's happening and why
By Nick Miller
March 12, 2019 — 4.52am
It’s Brexit crunch time. At last. With just two weeks until the date agreed for the UK to leave the European Union, the UK Parliament and government face hard decisions.
In January, British Prime Minister Theresa May put the Brexit divorce deal she had hammered out with the EU to a vote in the House of Commons.
It disentangles decades of interwoven EU and UK law, accounts for hundreds of billions of pounds the UK owes the EU for continuing obligations, and ensures a smooth transition so business and industry avoid a disruptive and costly ‘cliff edge’ Brexit.
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The theory that's too good to be true
Warwick McKibbin
Mar 12, 2019 — 11.45pm
There is currently a popular debate on how to stimulate economies that are stuck with low productivity, low real interest rates and a large amount of public debt. Proponents of an old idea in new clothes – modern monetary theory (MMT) – argue that central banks can solve all these problems by simply buying the large amounts of government debt and increasing the money supply. Advocates argue the stimulus to demand would cause firms to unleash investment and a long sustainable economic expansion would follow. This can only be described as a classic free lunch.
The idea of free lunches has a long tradition in policy debates. Free lunches are politically popular and have recurred many times in the 20th century and before. The experience with all economies that have swallowed this particular free lunch, is it is very costly and it can take a long time before the contradictions eventually causes a disastrous outcome.
The basic problem with MMT is it has been tested by countries and the result has always been hyperinflation, massive social and economic destruction and a crisis followed by more conventional economic policies being imposed. All existing experience – Venezuela today, Zimbabwe in 2008; Yugoslavia in 1994; Hungary in 1946; Greece in 1944; Wiemar Germany in 1923 – demonstrate the large costs.
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'The Bollocks Parliament': why Theresa May can't get a Brexit deal
By Nick Miller
March 13, 2019 — 8.21am
London: In the end, one paragraph written by a member of Theresa May’s own Cabinet killed her Brexit deal stone dead and put the whole project – and her government – on life support.
That paragraph was written by UK attorney-general Geoffrey Cox: a man who tweeted the single word “Bollocks” on Tuesday morning shortly before he gave May the bad news.
It’s not hard to imagine this was also the unspoken reaction of May when she received Cox’s legal opinion on the “improvements” to the Brexit divorce deal she had claimed to have just won just the night before.
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Mohamed El-Erian's take on the MMT debate
Mohamed A. El-Erian
Updated Mar 14, 2019 — 6.04am, first published at 5.36am
Despite having been slammed by several prominent economists, policymakers and top Wall Street corporate leaders, modern monetary theory is not going away anytime soon.
If anything, the debate over MMT will continue to fuel an interesting conversation among academics, politicians and policymakers. The more this happens, the greater the need for market participants to be aware of the following three issues:
1. The MMT debate will continue to be energised by the coincidence of multiple current and historical factors.
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How the world rebelled against US on air safety
Anthony Faiola
Mar 15, 2019 — 10.39am
Washington | The muddled response by US regulators and the Trump administration to the safety risks of the Boeing 737 Max is raising fresh doubt about the international airworthiness not only of a jetliner - but also of American leadership.
Across the globe, the US Federal Aviation Authority for decades represented the gold standard for air safety - a regulator whose decisions, particularly on American-made aircraft, boosted the confidence of plane travellers in New York, Miami and Los Angeles as well as London, Rio de Janeiro and Beijing.
Yet since Sunday's Ethiopian Airlines crash shortly after takeoff - the second 737 Max to go down in less than five months - foreign observers have watched Washington's handling of the crisis with mounting alarm. Critics at home and abroad are blaming, at best, erratic decision-making and, at worst, domestic commercial interests, for what many of them decry as a flawed US reaction.
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Congress has a breaking point. Trump may have found it this week.
By Sheryl Gay Stolberg and Michael D. Shear
March 15, 2019 — 12.35pm
Washington: Time and again — when President Donald Trump stood by Saudi Arabia after the killing of a Virginia-based journalist, when it looked as if he might intervene in the Russia investigation and when he threatened to declare a national emergency to pay for his border wall — lawmakers on Capitol Hill warned him not to push them too far.
This week, in a remarkable series of bipartisan rebukes to the president, Congress pushed back.
On Wednesday, with seven Republicans breaking ranks, the Senate joined the Democrat-led House in voting to end US military aid to Saudi Arabia's war in Yemen in protest over the killing of Jamal Khashoggi, a columnist for The Washington Post.
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The worst may already be over for the global economy
By Simon Kennedy and Zoe Schneeweiss
March 15, 2019 — 9.37am
The world economy may be the rockiest it's been since the global financial crisis, yet there are reasons to hope the current slowdown will prove short-lived.
Deutsche Bank, Morgan Stanley and Bloomberg Economics are among those whose economists reckon the slide will bottom out in this quarter or next before the world economy starts to accelerate again later in the year.
"Put the Federal Reserve pause, trade truce, and China stimulus together and we're looking for a trough in the first quarter and very moderate pick up ahead," said Tom Orlik, chief economist at Bloomberg Economics.
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The magic money tree fix for America's fiscal malaise
Mar 15, 2019 — 11.03am
Washington | Picture the scenario ... it’s budget time.
Australia's treasurer hunkers on the top floor of his department’s Langton Crescent HQ in Canberra putting final touches on the government’s finances.
He’s sweating because it’s the last budget before a tough federal election for a government trailing badly in the polls. For the sake of argument, let’s say 46 to 54 per cent.
The reason? Inflation has reappeared, seemingly out of nowhere after decades of respite. Years of unfettered deficit spending funded by central bank money “printing” has produced an overheated economy.
So hot, in fact, that inflation is lurching away from the 2-3 per cent target band the Reserve Bank monitors as one of its few remaining responsibilities.
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I look forward to comments on all this!
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David.
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